Intuitively (for me anyway), a higher number of short positions means there are a larger number of people who feel the price is going to tank. The only reason I can think of to explain why this is a bullish indicator is because for every short position taken, there's someone on the other side of the trade taking a long position(?) But if that's the case, maybe a higher volume of short positions shouldn't really be a bullish or bearish signal, but instead just a signal of price instability(?)

Thanks
-YBB
When we speak about the crypto cuxrencie then there is endless possibilities on what you can predict about the crypto singling and also the bull and bear trends. Just pick any trade period of the bitcoin since the January this year and see how many times bitcoin has gone wild up and then have reached its bottom consequently making things worst for the market. So the question is whether we should be calling it as short term positions that were opened up and closed immediately over the time ? Or was it just bull snapshot? This is what might be happening at this time and hence we can not really predict whats going on. It could be a proper bull run or just another trap itself.